Commerce Plaza
BACKGROUND
In late 2013, Quest Capital Partners (“QCP”) acquired this mixed-use apartment and retail property in the quaint sub-market known as Kenneth Village, a neighborhood shopping area located in Northwest Glendale. Purchased for $3.2 million in 2013, QCP invested approximately $1,200,000 and obtained a loan of $2,194,000 from Opus Bank at an interest rate of 4.30% on a 5-year term.
The property suffered from significant retail vacancy and significant deferred maintenance in the commons areas, retail suites, and apartments.
CAPITAL IMPROVEMENTS
- Lease-up and tenant improvements to 6 retail spaces and 6 apartments
- Security Cameras – Security camera signs
- Installed new exterior lighting, lobby chandelier, interior common area sconces
- Painted lobbies, exterior façade, and common hallways
- Installed new mailboxes
- Installed new storefront glass doors and secure entry with intercom
RESULTS
After completing renovations to the common area and exterior of the property, QCP was able to increase and increase cash flow. The much-needed capital improvements were welcomed by current and incoming residents which resulted in a higher retention rate and an 40% average increase in rent.
QCP sold the property in 2019 (6-year hold) for $6,000,000 which represented a 27.72% internal rate of return and approximately a 3.45x equity multiple on the investment.